Apparently (but not surprisingly to us) Gov. Lujan Grisham is having some heartburn about HB 547, the big tax “omnibus” bill the Legislature passed this session. Veto it!
Then, she should bring the Legislature back (possibly for a special session) and do two simple (and consistent) things that would boost New Mexico’s economy and reduce the harm of the gross receipts tax which is a “regressive” tax. Thus, addressing it would be “progressive” public policy.
There are two things to note: 1) the Legislature set aside $1.1 billion for tax reductions. The Gov. says she is having heartburn about making tax reductions that large. 2) The deadline to sign or veto is Friday, April 7, so MLG doesn’t have much time to act.
Here’s what SHOULD be in the tax bill:
- End pyramiding of business services. According to the Legislature’s own analysis this will reduce State revenues by $118 million annually by FY 27. In other words, this can easily be done. If cities need to be temporarily have some revenues made available due to the relatively small amount of revenue lost, that could be done. Local government concerns should not block much-needed tax reform.
- Immediately and permanently reduce GRT rates. According to the Legislature’s analysis each .5% reduction in the GRT reduces state revenue by about $500 million annually. So, realistically the top rate could come down by .75% immediately.
This is based on ideas that have been analyzed and vetted during the 2023 legislative session. Since the GRT is a “regressive” tax as left-wing Voices for Children points out reducing it is inherently “progressive.”
Will this happen? It’s extremely doubtful. The New Mexico Legislature traditionally exists not to pass good public policy that would help all New Mexicans, but to redistribute oil and gas money to other special interests.